Go back five years and the stock is up 599%.
But over the last year the stock's march has slowed. It's up 39% in the past year. That's a pace many companies in the bank card business, like Visa (V) and MasterCard (MA), have managed to beat. (Visa's up 43%, and MasterCard 52% over the past year.) Even a merchant processor, Global Payments (GPN), has done better, up 53% for the past year.
It shouldn't be this way. American Express has a unique position in the credit market: it not only processes transactions, but it solicits merchants and issues cards.
In this game it's the bank, the dealer, the processor -- everything.
What CEO Kenneth Chenault and his board seem to have concluded is that it's the company's history as primarily a travel and entertainment company that is to blame for the poor performance.
So they're turning AmEx's consumer business into something more like a credit card bank.
Jettisoning half of the travel business in a $900 million deal with private bank Certares International and the Qatar Investment Authority is just the most visible piece of that strategy.
The company has also been going downmarket as fast as it can, making its customer base look more like that of a typical bank, and offering revolving credit rather than just a one-month allowance that companies are then expected to pay off in full.
What was business accounting has become bank accounting.
This now includes the Everyday Card, a no-annual-fee rewards credit card that will compete directly with Visa and MasterCard cards from Capital One (COF) and others. The card is rolling out with an ad campaign headlined by actress-writer Tina Fey, playing a multitasking mom.